Chapter 12- understanding the consumer

Question 1

Market research

Answer 1

The process of gathering data in order to understand current and future customer needs and the nature of the market place. This reduces risks in developing a new business idea

Question 2

Primary market research

Answer 2

Is obtained first hand by the business that’s interested in the results. It involves field work and can be directly related to the needs of the individual business.

Question 3

Secondary market research

Answer 3

Also known as desk research. Uses data that has been gathered previously by another organisation

Question 4

Quantitative market research

Answer 4

Market research conducted where the results are numerical and can be analysed statistically

• generally collected from large samples and easy to analyse
• methods include questionnaires

Question 5

Qualitative market research

Answer 5

Market research to examine options and feelings

• often more useful than quantitive but is more difficult to collect and analyse
• methods include focus groups and indepth interviews

Question 6

What is the purpose of market research?

Answer 6

To ensure the upfront costs and expenses have minimal risk, to ensure the product will be profitable in the long run and help firms make marketing decisions

Question 7

Primary research benefits

Answer 7

Directly relevant to the business

Up to date data obtained

Competitors don’t have access

Question 8

Primary research drawbacks

Answer 8

Time consuming

Expensive

Sample can be misleading if sample size is too small, questions unclear or bias interviewer

Question 9

Secondary research benefits

Answer 9

Quick and easy to collect

A wide range of data available

Question 10

Drawbacks of secondary research

Answer 10

Data may not be reliable or up to date

May not be totally relevant

May not be in the form that is easily interpreted and analysed